Account blocked due to financial support to the Brodosplit shipyard

ZAGREB, April 15 (2022) – The financial support of the DIV to the Brodosplit shipyard due to the problem of refinancing of the loans of the VTB bank and the movements of the suppliers are the cause of the blocking of the account of the DIV, has said metal processing and shipbuilding group Hina on Friday.

He said loans from VTB, a Russian state-owned bank, could not be fully drawn down due to sanctions imposed on Russian banks following the Russian military invasion of Ukraine.

“That’s why funding for Brodosplit’s two biggest projects has been halted, and DIV has helped Brodosplit financially so that these projects don’t stop,” DIV said.

“We invested 60 million euros of equity in the two projects, instead of the 30 million planned, and this has exhausted us financially. This lack of financing and our public announcement of the force majeure problem have pushed some of our suppliers to demand payment of their debts, both due and not due, which resulted in the blocking of the DIV Group and Brodosplit accounts,” DIV told Hina.

He added that the group’s total debt to external suppliers was “around three weeks of their turnover”, but that this force majeure issue has been going on for eight weeks now and they are short of funding.

“Unfortunately, what we feared happened. DIV is a big and strong company with big profit and big capital, so this force majeure that happened will not affect our operation much,” said the group.

Brodosplit said two weeks ago that his access to 60 million euros had been blocked because he was financing the construction of two ships with money from VTB Europe, a Russian bank based in Frankfurt.

Asked about the steps they were taking to lift the blockade and talks with the Croatian Bank for Reconstruction and Development (HBOR) to secure a loan for Brodosplit, DIV said they were “in intense communication” with the HBOR. “In the event of a quick and positive result, Brodosplit would finish the ships on time, repay the loans and the state guarantee, everyone would make a profit and jobs would be preserved in this important export sector.”

Only part of VTB loans drawn

The group also commented on Finance Minister Zdravko Marić’s statement on Thursday that it was unclear how VTB’s loans could have affected Brodosplit’s liquidity and how sanctions against Russia could have had such a negative effect on Brodosplit. .

“The loans were mainly used (…) one of the two ships concerned was even completed,” he said.

DIV stated that Marić was correct that one ship was almost finished and the other was nearing completion, adding that “around €500,000 is needed for the first and around €8 million for the second”.

DIV said the minister was partly right that the loans had mostly been repaid, adding that was the key issue at the moment.

The two projects cost 150 million euros and Brodosplit planned to invest 30 million euros in them, the DIV said, adding that the remaining 120 million euros were to be borrowed from VTB, of which 82 million euros were been paid.

Since an additional €8.5 million is needed to complete the ships, Brodosplit has invested an additional €29.5 million in the project for a total of €59.5 million, DIV said, adding that restrictions imposed on VTB due to the war in Ukraine prevented the payment of the remaining 38 million euros.

As a result, Brodosplit and DIV had to spend an additional €29.5 million on top of the €30 million already invested in the project, DIV said.

The fact that the ships are almost complete is a strong argument for approving a loan, as the risk of return is minimal, he said, adding that Brodosplit is not asking for help but for a commercial loan to complete the ships. .

DIV said it was true that Brodosplit had been restructured with HRK 1.5 billion, approved by the government and the European Commission to cover its losses, and that DIV had committed to cover HRK 140 million in losses over five years .

Until 2010, Brodosplit had cost the state HRK 20 billion, while it had cost the state nothing in the last ten years since DIV acquired it, DIV said, adding that DIV and Brodosplit have paid HRK 3 billion to the state budget, HRK 3 billion to the workers. for wages and HRK 9 billion to suppliers.

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